Omega Fitness Expands Gym Numbers at Any Time With Major Acquisition | Franchise mergers and acquisitions

When Andy Gundlach and Russ Allen joined forces to create Omega Fitness in the fall of 2023, they joined the ranks of the largest Anytime Fitness franchisees in the system. With the acquisition of 21 gyms in Wisconsin, Omega is now the second largest.

Purchased from MDS Fitness, the addition of these gyms brings Omega to 123 Anytime locations in California, Florida, Illinois, Minnesota and Wisconsin, and adds to the company’s collection of equipment with solid, top-selling quality.

“MDS, overall, did well. They were focused on attracting the higher-price consumer, so with that strategy they were able to increase profits,” said Jonathan Lo, vice president of Rainier Partners, a Seattle-based private equity firm that backed Omega in 2023. “MDS was buying gyms and turning them around.”

Gundlach noted that one of Omega’s strengths “is growing its membership base, so we saw this as an opportunity to reinforce its strong sales by expanding its membership base.”

Gundlach, who spent a decade at Pizza Hut early in his career and rose from delivery driver to chief operating officer of a Southern Wisconsin Pizza Hut franchisee, opened his first Anytime Fitness in 2006. By 2023, he had 35 locations in Wisconsin and started talked to Allen, who operated 31 gyms in California and Florida, about the possibility of “giving us some energy” by combining their businesses and securing a PE investment.

They founded Omega Fitness and partnered with Rainier for future acquisitions.

“Every moment is very fragmented,” said Gundlach of a U.S. system of more than 2,300 gyms, about 1,200 of which are owned by single-site operators. Opportunities for consolidation emerged after the coronavirus pandemic, and the franchisor also “was focused on bringing private capital into the brand,” he said.

Rainier Partners, whose executives have investment experience in Taco Bell, Planet Fitness and other consumer services, saw an opportunity to bring Anytime to market early, Lo said.

“We liked Anytime, just like Planet Fitness did 10 or 15 years ago, because there were very few private equity investors and a lot of small operators,” Lo said. At any given time, he continued, “it generates really good unit economics. The profitability is really high.”

Average sales for the 12 months ended Feb. 29 were $441,894 at 1,530 gyms, Anytime said in its 2024 franchise disclosure document. It reports an average monthly membership of 714. For gyms that implemented the Smart Coaching initiative and its operational and sales tools, AUV increased to $499,088.

Lo noted that another attractive factor was the smaller size of the Anytime gym, which ranged from 4,000 to 6,500 square feet compared to Planet Fitness or Crunch Fitness, which had more than 20,000 square feet.

“There is a lot of competition in the gym. The thing about Anytime is that the boxes are smaller, they can go to smaller cities and smaller markets,” Lo said, without the pressure of huge capital expenditures and higher rents.

The starting investment range for Anytime is $397,516 to $973,121. Meanwhile, the cost to open a Planet Fitness starts at $1.5 million; Crunch’s investment range starts at $918,000.

Gundlach noted that his gyms rely on small group training and personal training, which improves member retention by creating a fitness community. It plans to apply this approach to newly acquired MDS units.

Omega is also working on a series of gym remodels as part of Anytime’s new “Evolution Refresh” initiative, which Gundlach said is the first new project in 12 years and is part of the brand’s “Real AF” platform. The platform, launched in late 2021, includes a gym interior upgrade with branded spaces for personal training, nutritional coaching and recovery services, as well as a modernized logo.

Gundlach said they have refreshed about 20 locations so far and have seen an increase in membership at these new-look gyms. Omega has two new locations under construction and pre-sale.

Anytime Fitness is part of Self Esteem Brands, which after its April merger with Orangetheory Fitness changes its name to Purpose Brands. In addition to its 2,300 domestic gyms, Anytime has another 2,700 gyms in international markets.